7 Money Rules Everyone Should Live By

With the economy ever changing since the beginning of our disastrous recession, we have all had to find ways to adapt to keep our finances a float. Here's 7 money rules that everyone should remember with adjustments for the new economy:

1. Save at least 15% (20% would be even better) of your income - It used to be 10% for the longest time, but this is quickly becoming old school. With people no longer having pensions to look forward too, shorter retirement periods, better market retirements returns, or even social security it is now more important to save then ever. The more you save the better.
2. Keep your debt to income ratio below 30% - The old school number was 36%. Dropping that number an additional 6% gives you more cash flow to put towards your emergency fund and retirement saving.
3. Invest less in stock - Don't invest more than 5% of your portfolio in company stock. The old way was 10%, but it's safer to diversify.
4. Determine how big your nest egg needs to be - Figure out how big your nest egg needs to be by multiplying your ideal annual income by 30. This is 5% higher now because people are living longer.
5. Only refinance if interest rates are one percentage point lower than your current rate - Do the math and determine how long you plan to live in the house. It will usually take a few years to make up what you will have to pay in closing costs.
6. Keep your discretionary spending under 20% - This includes items like clothes, dining out, or going to the movies. The rule used to be 30%, but with debt going up you need that extra money to pay it down.
7. Figure out how much of your portfolio should be in stocks - Use this formula 110- Your Age = In Stocks %. Subtracting 100 from your age was the way to go, but with rising medical costs and people living longer 110 is safer. Try 120 if you really want to be safe.     

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